MGT 210 Lecture Notes - Lecture 1: Offshoring, Outsourcing
Document Summary
Consequences of increasing global integration: volume of exports is increasing dollar value of international trade is increasing, fdi flows to less developed countries. Imports are penetrating deeper into the world"s largest economies. Outsourcing- organization contracts with outside provider to produce goods or services. Offshoring companies move jobs to another country where wages are lower. International- uses existing capabilities to expand into foreign markets. Few pressures for economies of scale or local responsiveness pfizer. Advantage: transfer of skills from parent company to the rest of the world. Dis: doesn"t respond to locality; doesn"t provide opportunity to achieve low-cost position via scale economies. Multinational- several subsidiaries operating as stand-alone business units in multiple countries. Dis: higher manufacturing costs and duplication of effort. Global views the world as a single market; operations controlled centrally. View the world as one use scale economies. Transnational specialized facilities permit local responsiveness, complex coordination mechanisms provide global integration.
